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Ecuador may not produce the most bananas in the world--India holds that distinction--but it is the leading exporter of the popular tropical fruit.

Even though the sector experienced some setbacks last year, the Association of Banana Exporters of Ecuador (AEBE), which represents the leading growers, says it is on track for a strong performance for 2011, particularly with respect to Eastern European markets.

The industry in Ecuador has long faced stiff competition for global market share from countries such as Colombia, Costa Rica and Guatemala as well as the Philippines and some African nations.

Latin American growers as a whole benefited when, in late 2009, the European Union--a leading destination for bananas--ended a XX-year trade fight and agreed to lower tariffs on Latin American bananas. Since 1993, former European colonies, such as the Ivory Coast and Belize, had enjoyed preferential treatment for their bananas.

But in 2010, Ecuador's banana industry hit some snags.

"Shipments of Ecuadorian bananas to the markets of the United States, European Union and Russia fell in 2010 compared to 2009, among other reasons because of severe weather in the second half of the year that affected the fruit's development," explains Eduardo Ledesma, president of the AEBE. At the same time, "production recovered in other exporting countries like Costa Rica and Honduras and a significant percentage of that fruit ended up in the United States market."

The United States, the European Union and Russia have been, and continue to be, the most important markets for bananas from Ecuador, Ledesma says.

Demand in Russia took a hit in the wake of the economic crisis that began in 2008, and consumers turned to other fruits, such as oranges, apples and pears.

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"Added to this were the problems of divisions in its internal distribution chain and the number of buyers in 2010 increased compared to 2009," Ledesma says.

But also in 2010, Ecuador celebrated the launch of Maersk's ECUBEX shipping service, which brings bananas and other products from Guayaquil to St. Petersburg, with stops in Europe in Balboa and Rotterdam, in just XX days.

That new service is paying dividends in 2011, as Russian imports of bananas have hit record levels. Part of this increase can be attributed to high prices for other fruits, such as apples. Even so, "this service, by guaranteeing the banana shipments over greater distances without damaging the quality of the fruit, has created a greater dynamism in this market [Russia] and beyond, to all the countries that used to be members of the Soviet Union, whose imports have increased," Ledesma says.

In northern European countries, Ledesma says, Ecuador is getting a lift from retail chains, such as U.K.-based Tesco, pursuing a strategy of buying fruit directly from producers.

Ledesma emphasizes that the global market remains highly competitive. "We have additional costs, such as the Panama Canal passage, as well as a higher tariff to get our bananas into the European Union," he says, noting that the EU tariffs affect Turkey as well. He says countries such as Argentina are increasing their output and a number of producing countries are seeking trade protection against bananas from other countries.

Those challenges are ongoing, as are the efforts to meet them, Ledesma says. "For that reason we continue to be the leading exporter country of this fruit in the world."